Browse now and then Request a car loan with bad credit rating
In this article, you will learn why you should choose a car loan very carefully. There are many factors that need to be addressed before taking out a car loan. Interest rates, bank fees, payment terms, insurance and more are required. If you approach this issue correctly, you can choose a very good deal and pay off the loan on time, and the purchase will bring satisfaction and benefit.
Not everyone has the money to buy a car, so getting a loan is a common decision. For a full understanding of what auto loan is and how you should approach it, we offer you this article. You will be able to find out how a car loan with bad credit rating is actually made.
First, you need to understand what a car loan is. A car loan is an agreement with a bank that gives out a certain amount of money just to buy a car. Please note that spending money lent to you by the bank will only go towards buying a car. It may be a new or supported car.
The main feature of car loans is that the vehicle is a pledge without fail. This makes it possible to take out such a loan even if you have no property. Also, in most cases, the bank will have to pay the down payment, but there are optional lending programs that are optional.
Basic requirements for borrowers
Depending on the bank, the requirements may vary, but there are general criteria:
- the loan will be given only to the person who has a steady income and can document it;
- in total the borrower should have work experience of 2-3 years. At the last job it is necessary to work 5-6 months;
- age can range from 21-22 years for both men and women. The loan is unlikely to be given to women over 55 and men over 60;
- citizenship of Ukraine is compulsory;
- permanent registration is required in the region where the car loan is taken.
These were the minimum requirements you would make in each bank. But even if you are 21 years old and already have 1 year of service, there is a high probability of refusal of credit, and if you get, then at a higher percentage.
Amount of credit and insurance
First of all, what you should pay attention to when choosing a car loan is the amount needed to buy a car. It is important to remember that the loan amount will always be greater than the cost of the car itself. The insurance amount will be added to the loan amount as it is obligatory. The bank will not issue a car loan without full insurance.
Usually banks themselves “impose” the insurer, so it is necessary to carefully and carefully consider the premiums. It is not necessary to forget about this since different banks have different insurance premiums and sometimes they are very high. There are also additional costs that insurers require, such as installing an alarm or parking at night. If you do not carefully study all these points, you can overpay the amount of car loan several times.
The interest rate on a car loan
Each loan is issued at a specific interest rate. This is the amount through which we overpay for a car. Banks provide this rate to the borrowers in the form of interest payable on the loan. It is they who are the first to pay attention to borrowers, and many, when choosing a loan, focus only on the stated interest rate. But is this correct?
The interest rate is only a fraction of the money you pay for the entire loan. Before choosing a bank, in addition to the interest rate, you should pay attention to other points. Yes, there are several other factors that affect the total cost of a car loan. For example, in one bank the loan rate is set at 10% per year, in another bank – 15%. It may seem that the first bank offers a better deal because of the lower interest rate.
But if you go deeper into the terms of the contract with the first bank, it charges an additional monthly payment for account servicing. As a result, considering all that is required to pay the bank (interest rate + servicing), the loan payment amount may be higher than those of 15% of another bank. Therefore, it is worth examining all the credit aspects related to the payment of bank money.